Exhibit 3.16
CERTIFICATE OF DESIGNATIONS
OF THE
4.0% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES H
(Par Value, $10.00 Per Share)
OF
BICO, INC.
______________________________
Pursuant to Section 1522 of the
Business Corporation Law of 1988 of the Commonwealth of
Pennsylvania
______________________________
The undersigned duly authorized officer of BICO, Inc., a
corporation organized and existing under the laws of the
Commonwealth of Pennsylvania (the "Corporation" or the
"Company"), in accordance with the provisions of Section 1522 of
the Business Corporation Law of 1988 of the Commonwealth of
Pennsylvania, DOES HEREBY CERTIFY:
That the Articles of Incorporation of the Corporation
authorize the creation of up to Five Hundred Thousand (500,000)
shares of the Corporation's preferred stock, par value $10.00 per
share (such preferred stock, together with all other preferred
stock of the Corporation, the creation of which is authorized by
the Articles of Incorporation, the "Preferred Stock"); and
That pursuant to the authority conferred upon the Board of
Directors (the "Board") by the Articles of Incorporation of the
Corporation, the Board, on October 22, 2001, adopted the
following resolution creating a series of Three Hundred Ninety-
Six Thousand (396,000) shares of Preferred Stock designated as
set forth below:
RESOLVED, that pursuant to the authority expressly granted
to and vested in the Board by the Articles of Incorporation of
the Corporation, as amended (the "Articles of Incorporation"),
and the Business Corporation Law of 1988 of the Commonwealth of
Pennsylvania, the issuance of a series of Preferred Stock, which
shall consist of Three Hundred Ninety-Six Thousand (396,000)
shares of the Five Hundred Thousand (500,000) shares of Preferred
Stock which the Corporation now has authority to issue, be, and
the same hereby is, authorized, and the Board hereby fixes the
powers, designations, preferences and relative participating,
optional or other special rights, and the qualifications,
limitations or restrictions of the shares of such series (in
addition to the powers, designations, preferences and relative
participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, set forth in
the Articles of Incorporation which may be applicable to the
Preferred Stock) authorized by this resolution as follows:
Series H Cumulative Convertible Preferred Stock:
Section 1. Designation and Rank. The designation of
such series of Preferred Stock authorized by this resolution
shall be "Series H Cumulative Convertible Preferred Stock" (the
"Series H Preferred Stock"). The number of shares constituting
the Series H Preferred Stock shall be 396,000. Such number of
shares may be increased or decreased by resolution of the Board
of Directors; provided, that no decrease shall reduce the number
of shares of Series H Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding
securities issued by the Corporation convertible into Series H
Preferred Stock.
Section 2. Conversion Rights.
(a) Each holder of shares of Series H Preferred Stock shall
have the option to convert any or all of the shares issued to
such holder at any time after the earlier of (i) the seventy-
fifth (75th) day following the date on which such shares of
Series H Preferred Stock were first issued (the "Class B Original
Issuance Date"), or (ii) thirty five (35) days after the date
after the Original Issue Date on which a registration statement
to be filed by the Corporation with the United States Securities
and Exchange Commission with respect to shares of its Common
Stock becomes effective.
(b) Each share of Series H Preferred Stock may be converted
at the option of the holder thereof at the times set forth
herein, and without the payment of any additional consideration,
into the number of fully paid, nonassessable shares of common
stock, $.10 par value per share, of the Corporation (the "Common
Stock"), as is determined by applying the following formula (the
"Conversion Formula"): divide the Original Issue Price (as
defined in subsection 7(a) hereof) by 80% of the average closing
bid price (as reported by The OTC or Electronic Bulletin Board)
of the Common Stock for the five (5) consecutive trading days
ending on the trading day immediately preceding the date of
receipt by the Corporation of the notice of conversion (the date
upon which notice of conversion is received by the Corporation is
hereinafter referred to as the "Date of Conversion", and the
foregoing formula price as hereinafter referred to as the
"Conversion Price"). In the event that any shares of Series H
Preferred Stock remain outstanding and unconverted on the fifth
(5th) anniversary of the Original Issuance Date, such shares
shall automatically be converted at that time in accordance with
the Conversion Formula.
Section 3. Mechanics of Conversion.
(a) No fractional shares of Common Stock shall be issued
upon conversion of Series H Preferred Stock. In lieu of any
fractional share to which the holder would otherwise be entitled,
the Corporation shall round up to the nearest whole share. In
order to convert Series H Preferred Stock into shares of Common
Stock, the holder shall surrender the certificate or certificates
therefor, duly endorsed, to the office of the Corporation, and
shall give written notice to the Corporation at such office that
the holder elects to convert the same, the number of shares of
Series H Preferred Stock so converted and a calculation of the
appropriate Conversion Price (with an advance copy of the
certificate(s) and the notice by facsimile); provided, however,
that the Corporation shall not be obligated to issue certificates
evidencing shares of Common Stock issuable upon such conversion
unless such shares of Series H Preferred Stock are delivered to
the Corporation as provided above, or the holder notifies the
Corporation or its transfer agent that such certificates have
been lost, stolen or destroyed and executes an agreement
satisfactory to the Corporation and its transfer agent to
indemnify the Corporation from any loss incurred by it in
connection with such certificates.
(b) Within two (2) business days after the notice of
conversion is delivered in accordance with the procedures set
forth above, the Corporation shall instruct the transfer agent to
issue shares of its Common Stock and to forward the same to the
holder, together with the certificate or certificates for the
Preferred Stock to be converted as described above.
(c) In no event shall any of the holders of record of the
Series H Preferred Shares be entitled to convert such outstanding
shares to the extent such conversion would result in any such
holder beneficially owning more than four and nine tenths percent
(4.9%) of the outstanding shares of the Corporation's Common
Stock. For these purposes, beneficial ownership shall be defined
and calculated in accordance with Rule 13d-3, promulgated under
the Securities Exchange Act of 1934, as amended.
Section 4. Dividend Provisions. The holders of record of
shares of Series H Preferred Stock shall be entitled to receive
when, as, and if declared by the Board of Directors cumulative
dividends at the rate of four percent (4.0%) of the Original
Issue Price per share per annum, out of any funds legally
available therefor, prior and in preference to any declaration or
payment of any dividend (payable other than in Common Stock or
other securities and rights convertible into or entitling the
holder thereof to receive, directly or indirectly, additional
shares of Common Stock of the Corporation) on the Common Stock of
the Corporation. The dividends shall accrue from the Original
Issuance Date and be payable, in arrears, quarter-yearly on the
first day of January, April, July and October of each year. No
quarterly dividend shall be declared on the Series H Preferred
Stock by the Board of Directors in excess of one-fourth of the
net earnings of the Corporation as reported in the annual
financial statement of the Corporation for the immediately
preceding fiscal year. Each declared dividend shall be payable
to the holders of record as they appear on the stock books of the
Corporation at the close of business on such record dates, not
more than sixty (60) calendar days preceding the payment dates
therefor, as are determined by the Board of Directors of the
Corporation or a duly authorized committee thereof.
Notwithstanding the foregoing, in lieu of a cash dividend
payment, the Corporation may elect to distribute shares of Common
Stock as payment of any dividend then due and payable. If the
Corporation elects to pay dividends in Common Stock in lieu of
cash, the Corporation shall issue to such holder such number of
fully paid and non-assessable shares of Common Stock as shall
have an aggregate Conversion Price value (determined as of the
date such dividend is payable) equal in amount to the cash
dividend payable.
Section 5. Corporate Events.
(a) In the event of (i) any declaration by the Corporation
of a record date of the holders of any class of securities for
the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution or (ii) any capital
reorganization of the Corporation, any reclassification or
recapitalization of the capital stock of the Corporation, any
merger or consolidation of the Corporation and any other entity
or person, or any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the Corporation
shall mail to each holder of record of Series H Preferred Stock
at least ten (10) days prior to the record date specified herein,
a notice specifying (A) the date on which any such record date is
to be declared for the purpose of such dividend or distribution
and a description of such dividend or distribution, (B) the date
on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up is
expected to become effective, and (C) the time, if any, that is
to be fixed, as to when the holders of record of Common Stock (or
other securities) become eligible to receive securities or other
property deliverable upon such reorganization, reclassification,
transfer, consolidation, merger, dissolution or winding up.
Notwithstanding the foregoing, the Corporation shall not be
required to disclose to the holders of the Series H Preferred
Stock any information which is "non-public" for the purposes of
the rules and regulations of the Securities Exchange Commission.
(b) The closing bid price used to determine the Conversion
Price shall be appropriately adjusted to reflect, as deemed
equitable and appropriate by the Corporation, any stock dividend,
stock split or share combination of the Common Stock. In the
event of a merger, reorganization, recapitalization or similar
event of or with respect to the Corporation (a "Corporate
Change") (other than a Corporate Change in which all or
substantially all of the consideration received by the holders of
the Corporation's equity securities upon such Corporate Change
consists of cash or assets other than securities issued by the
acquiring entity or any affiliate thereof), the Series H
Preferred Stock shall be assumed by the acquiring entity and
thereafter the Series H Preferred Stock shall be convertible into
such class and type of securities as the holder would have
received had the holder converted the Series H Preferred Stock
immediately prior to such Corporate Change, as appropriately
adjusted to equitably reflect the Conversion Price and any stock
dividend, stock split or share combination of the Common Stock
after such corporate event.
Section 6. Reservation of Stock Issuable Upon Conversion.
Immediately following the authorization of
additional shares at the Special Meeting of Shareholders
scheduled for November __, 2001, the Corporation shall at all
times reserve and keep available out of its authorized but
unissued shares of Common Stock solely for the purpose of
effecting the conversion of the shares of Series H Preferred
Stock, such number of its shares of Common Stock as shall from
time to time be sufficient to effect the conversion of all then
outstanding shares of Series H Preferred Stock; and if at any
time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of all then
outstanding shares of the Series H Preferred Stock, the
Corporation will take such corporate action as may be necessary
to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purpose.
Section 7. Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding
up of the Corporation, either voluntary or involuntary, the
holders of record of shares of Series H Preferred Stock shall be
entitled to receive, immediately prior and in preference to any
distribution to the holders of the Corporation's equity
securities, an amount per share equal to the sum of (i) Five
Hundred Dollars ($500) (the "Original Issue Price") and (ii) any
accrued and unpaid dividends on the Series H Preferred Stock. If
upon the occurrence of such event the assets and funds thus
distributed among the holders of the Series H Preferred Stock
shall be insufficient to permit the payment to such holders of
the full preferential amounts due to the holders of the Series H
Preferred Stock, then the entire assets and funds of the
Corporation legally available for distribution shall be
distributed among the holders of the Series H Preferred Stock,
pro rata, based on the liquidation amounts to which such holders
are entitled.
(b) Upon the completion of the distribution required by
subsection 7(a), if assets remain in this Corporation, they shall
be distributed to holders of parity securities (unless holders of
parity securities have received distributions pursuant to
subsection 7(a) above) and junior securities in accordance with
the Corporation's Articles of Incorporation including any duly
adopted Articles of Amendment of the Articles of Incorporation.
(c) A consolidation or merger of the Corporation with or
into any other corporation or corporations, or a sale, conveyance
or distribution of all or substantially all of the assets of the
Corporation or the effectuation by the Corporation of a
transaction or series of related transactions in which more than
50% of the voting power of the Corporation is disposed of, shall
not be deemed to be a liquidation, dissolution or winding up
within the meaning of this Section 7, but shall instead be
treated in accordance with Section 5 hereof.
Section 8. Redemption Rights.
(a) The Series H Preferred Stock may be redeemed at the
Corporation's option, in whole or in part, at any time and from
time to time thirty (30) days after the Original Issuance Date,
at a redemption price per share equal to one and two tenths
(1.2) times the Original Issue Price of such share, plus any
accrued and unpaid dividends on the shares to be redeemed (such
sum is hereinafter referred to as the "Redemption Price");
provided, however, that if there are any accrued quarter-yearly
dividends on the Series H Preferred Stock which have not been
paid or declared and a sum sufficient for the payment thereof set
apart, the Corporation may not redeem any shares of Series H
Preferred Stock unless all then outstanding shares of such stock
are so redeemed.
(b) At least thirty (30) days but not more than sixty (60)
days prior to the date on which the Corporation wishes to effect
a redemption pursuant to subsection 8(a) (the "Redemption Date"),
written notice shall be sent via telecopy (with a copy to be
mailed, first class postage prepaid), to each holder of record
(at the close of business on the business day next preceding the
day on which notice is given) of the Series H Preferred Stock to
be redeemed, at the address last shown on the records of the
Corporation for such holder, notifying such holder of the
redemption to be effected, specifying the number of shares to be
redeemed from such holder, the Redemption Date, the Redemption
Price, the place at which payment may be obtained, and calling
upon such holder to surrender to the Corporation, in the manner
and at the place designated, its certificate or certificates
representing the shares to be redeemed (the "Redemption Notice").
The date upon which the Corporation issues the Redemption Notice
shall be the "Redemption Notice Date". Each holder of Series H
Preferred Stock to be redeemed shall surrender to the Corporation
the certificate or certificates representing such shares, in the
manner and at the place designated in the Redemption Notice, and
thereupon the Redemption Price of such shares shall be payable by
wire transfer of immediately available funds to an account
designated in writing by such holder and each surrendered
certificate shall be canceled. In the event less than all the
shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.
(c) From and after the Redemption Notice Date, unless there
shall have been a default in payment of the Redemption Price, all
rights of the holder of shares of Series H Preferred Stock
designated for redemption in the Redemption Notice as holders of
Series H Preferred Stock (except the right to receive the
Redemption Price without interest upon surrender of their
certificate or certificates) shall cease with respect to such
shares, and such shares shall not thereafter be transferred on
the books of the Corporation, or converted to shares of Common
Stock, or be deemed to be outstanding for any purpose whatsoever.
If the funds of the Corporation legally available for redemption
of shares of Series H Preferred Stock on any Redemption Date are
insufficient to redeem the total number of shares of Series H
Preferred Stock to be redeemed on such date, those funds which
are legally available will be used to redeem the maximum possible
number of such shares ratably among the holders of such shares to
be redeemed based upon their holdings of Series H Preferred
Stock. The shares of Series H Preferred Stock not redeemed shall
remain outstanding and entitled to all the rights and preferences
provided herein. At any time thereafter when additional funds of
the Corporation are legally available for the redemption of
shares of Series H Preferred Stock, such funds will immediately
be used to redeem the balance of the shares which the Corporation
has become obliged to redeem on any Redemption Date, but which it
has not redeemed.
(d) On or prior to each Redemption Date and after giving
the Redemption Notice, the Corporation may deposit the Redemption
Price of all shares of Series H Preferred Stock designated for
redemption in the Redemption Notice and not yet redeemed with a
bank or trust corporation organized under the laws of the United
States of America or the Commonwealth of Pennsylvania, doing
business in the City of Pittsburgh and having aggregate capital
and surplus of at least $5,000,000 as a trust fund for the
benefit of the respective holders of the shares designated for
redemption and not yet redeemed, with irrevocable instructions
and authority to the bank or trust corporation to pay the
Redemption Price for such shares to their respective holders on
or after the Redemption Date upon receipt of notification from
the Corporation that such holder has surrendered its share
certificate to the Corporation pursuant to Section 8(b) above.
As of the date of deposit of the Redemption Price as aforesaid
(the "Deposit Date"), the deposit shall constitute full payment
of the shares to their holders, and from and after the Deposit
Date the shares so called for redemption shall be redeemed and
shall be deemed to be no longer outstanding, and the holders
thereof shall cease to be stockholders with respect to such
shares and shall have no rights with respect thereto except (i)
the right to exercise before the close of business on the second
full business day prior to the Redemption Date any right of
conversion to which they might be entitled under Section 2(a)
hereof and (ii) the rights to receive from the bank or trust
corporation payment of the Redemption Price of the shares,
without interest, upon surrender of their certificates therefor.
Such instructions shall also provide that any moneys deposited by
the Corporation pursuant to this Section 8(d) for the redemption
of shares thereafter converted into shares of the Corporation's
Common Stock pursuant to Section 2(a) hereof prior to the
Redemption Date shall be returned to the Corporation forthwith
upon such conversion. The balance of any moneys deposited by the
Corporation pursuant to this Section 8(d) remaining unclaimed at
the expiration of six (6) years following the Redemption Date
shall thereafter be returned to the Corporation upon its request
expressed in a resolution of its Board of Directors.
Section 9. Voting Rights. The holders of Series H
Preferred Stock will have voting rights as set forth below or as
otherwise from time to time required by law. To the extent that
under Pennsylvania law the vote of the holders of the Series H
Preferred Stock, voting separately as a class, is required to
authorize a given action of the Corporation, the affirmative vote
or consent of the holders of at least a majority of the
outstanding shares of the Series H Preferred Stock shall
constitute the approval of such action by the class. On all
other matters, the holders of Series H Preferred Stock shall be
entitled to vote with the holders of Common Stock, voting
together as one class, and each share of Series H Preferred Stock
shall be entitled to one vote. Holders of the Series H Preferred
Stock shall be entitled to notice of all shareholders meetings or
written consents with respect to which they would be entitled to
vote, which notice would be provided pursuant to the
Corporation's by-laws and applicable statutes.
Section 10. Protective Provisions. So long as shares of
Series H Preferred Stock are outstanding, the Corporation shall
not take any action that would impair the rights of the holders
of the Series H Preferred Stock set forth herein and shall not
without first obtaining the approval (by vote or written consent,
as provided by law) of the holders of at least a majority of the
then outstanding shares of Series H Preferred Stock:
(a) alter or change the rights, preferences or privileges
of the shares of the Series H Preferred Stock or any other
securities so as to affect adversely the Series H Preferred
Stock;
(b) create any new class or series of stock having a
preference over the Series H Preferred Stock with respect to
distributions pursuant to Section 7 above; or
(c) do any act or thing which would result in taxation of
the holders of shares of the Series H Preferred Stock under
Section 305 of the Internal Revenue Code of 1986, as amended (or
any comparable provision of the Internal Revenue Code as
hereinafter from time to time amended).
/s/Fred E. Cooper
Chief Executive Officer
ATTEST:
/s/Anthony J. Feola
Secretary